Which Wage Distributions are Consistent with Statistical Discrimination?


We derive a non-parametric test for statistical discrimination that can be applied to cross-sectional wage data. Specifically, we show that the wage distributions for two groups (with identical observable characteristics) are consistent with a general reduced-form model of statistical discrimination if, and only if, neither wage distribution first-order stochastically dominates the other. Our model allows us to interpret a rejection of this condition as evidence of bias.


If you have any questions regarding the seminar, please contact the seminar organizers Kjell Gunnar Salvanes or Helene Bjørndal Fosse.